Analytical Procedures Performed in the Overall Review Stage of an Audit

question 62

Multiple Choice

Analytical procedures performed in the overall review stage of an audit suggest that several accounts have unexpected relationships.The results of these procedures most likely would indicate that

• A) Fraud exists within the relevant accounts.
• B) Internal control activities are not operating effectively.
• C) Additional tests of details are required.
• D) The communication with the audit committee should be revised.

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Definitions:

Journal Entry

A record in accounting that represents a transaction and its effect on various accounts within the financial statements.

Trading Securities

Financial instruments held by a firm for the purpose of short-term profit through trading on a stock exchange.

Sale

The act of selling a product or service in exchange for money or other compensation.

Equity Securities

Financial instruments that represent ownership interest in a company, such as stocks.